Tenancy Deposit Loan Scheme (Updated 11 May 2020)
Updated 16 September 2020
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This publication is available at https://www.gov.uk/government/publications/joint-service-housing-advice-office-leaflet-index/tenancy-deposit-loan-scheme-updated-4-may-2020
Serial No: JSHAO/29
Date: March 2020
Review Date: April 2021
Moving home within the private rented sector is very competitive and can be expensive. Sometimes affording a deposit can be a barrier to moving, and this is a fact that has now been recognised by the Government and within the Ministry of Defence.
A new Tenancy Deposit Loan Scheme was launched on 6 July 2015 to allow Civilian and Service personnel to apply for an advance of pay/salary to help meet the cost of a deposit for a rental property.
JSP 754 Part 1, Chapter 7, Section 5 (07.05061, para m. has been updated to include this type of advance of pay.
Advance
An advance of pay may be requested by an individual in order to meet the cost of a tenancy deposit if renting and residing in a private property in the United Kingdom.
Eligibility
Within 45 days of receiving the advance, personnel must provide Unit HR with evidence that the advance has been used to secure a rented property and that their landlord has protected the deposit in a Tenancy Deposit Protection Scheme. This evidence should normally be a copy of the certificate confirming that the deposit has been protected in a relevant scheme. This scheme is not available to personnel already in receipt of LSAP or FHTB.
Affordability
In conjunction with the Chain of Command, personnel are responsible for ensuring that they can afford to repay the advance, alongside other advances and living costs. An individual should be aware that an advance is classed by HM Revenue and Customs as a beneficial loan. If the average amount outstanding on a Tenancy Deposit Loan and any other beneficial loan exceeds the HMRC threshold in a given tax year, they may be subject to a personal tax liability.
Approval
Approval is required by a Commanding Officer or Delegated Authority. An individual will be required to sign a waiver from the Minimum Drawing Rate considerations.
Repayment
The advance will be repaid within 12 months or prior to an individual leaving the Armed Forces, whichever is the shortest period, although an individual may elect to pay off the debt more quickly if they choose.
Confidentiality
Personal information must be treated confidentially. Personnel may redact the names of other tenants from the Tenancy Deposit Protection Scheme prior to showing it to their Commanding Officer or Delegated Authority. Additionally, after evidence has been provided, the certification should be returned to and retained by the Service person for audit purposes and no central copy should be held.
Applications
Applications made by Service personnel are to be completed on JS Form JPA E004. A new value of ‘Tenancy Deposit Loan Scheme’ has been added to the drop-down list for ‘Reason for Advance’ in the Advance of Pay Element on JPA for this type of advance.
Applications made by civilian personnel must be completed on HR Form 258. Request for Rental Deposit Scheme Advance. The process for the advance works very similarly to the Season Ticket Advance Scheme which most Defence personnel will be familiar with.